Tools of the Trade Quest
The opportunity to imbue an item in unlocked after the completion of the Tools of the Trade quest in Act I. You must find and return the Horadric Malus item to Charsi, the blacksmith in the Rouge's Camp. The Malus is found in the Barracks section of the Rouge Monastery. It is guarded by a creature called The Smith.
Limitations of Imbuing
Imbuing an item will turn one piece of normal equipment, either a weapon or armor, into a rare-level item with randomly selected abilities. Rare, unique or magic items, as well as items from a set, cannot be imbued.
Cheat to Revert to Saved Version
This imbue cheat requires two networked computers running "Diablo II." Copy the "Save" folder containing the game that has the ability to imbue from the "Diablo II" system folder to the desktop. Start both copies of the game. Start a TCP/IP game with the computer that does not have the ability to imbue. Log in to the network game with the imbuing character and imbue an item. Give the item to the other character and log out. Copy the old "Save" file back to the system folder and restart the game. Continue to imbue and transfer the item to the other character, and then recopy the save data as many times as is needed to imbue all the items you desire.
Cheat to Keep the Horadric Malus
Set the Horadric Malus as your secondary weapon before talking to Charsi. Switch back to the primary weapons set, hiding the Malus. Talk to Charsi, who will thank you for returning the Malus and offer to imbue an item for you. Imbue an item and exit the conversation. Save and exit the game. Re-enter the game and talk to Charsi again. As long as you have the Malus hidden as a secondary weapon you should be able to imbue, save and exit, and imbue again.